Conflict Of Interesthttp://www.businessinsider.com/category/conflict-of-interest
en-usFri, 09 Dec 2016 10:28:54 -0500Fri, 09 Dec 2016 10:28:54 -0500The latest news on Conflict Of Interest from Business Insiderhttp://static3.businessinsider.com/assets/images/bilogo-250x36-wide-rev.pngBusiness Insiderhttp://www.businessinsider.com
http://www.businessinsider.com/donald-trumps-conflict-of-interest-blind-spot-2016-12Donald Trump's conflict-of-interest blind spothttp://www.businessinsider.com/donald-trumps-conflict-of-interest-blind-spot-2016-12
Wed, 07 Dec 2016 19:01:00 -0500Elizabeth C. Tippett
<p><img style="float:right;" src="http://static5.businessinsider.com/image/57a23ec0ce38f234008b48ff-1818/rtr2nvw2.jpg" alt="donald trump golfing" data-mce-source="REUTERS/David Moir" data-mce-caption="Donald Trump."></p><p>President-elect Trump will face an array of conflicts of interest when he takes office.</p>
<p>These conflicts are not minor or isolated. They are legion. And, to use his own favored language, they will be “huge.”</p>
<p>His real estate holdings abroad <a href="http://www.nytimes.com/2016/11/26/us/politics/donald-trump-international-business.html?_r=0">make him vulnerable</a> to offers of favorable treatment (or financial threats) by governments overseas.</p>
<p>He stands to <a href="http://www.npr.org/2016/12/05/503611249/trumps-businesses-and-potential-conflicts-sorting-it-out">personally benefit (or suffer)</a> from decisions made by government departments like the Internal Revenue Service, the Department of Labor and the Environmental Protection Agency.</p>
<p>Several conflicts have already surfaced. The president-elect apparently <a href="http://www.nytimes.com/2016/11/21/business/with-a-meeting-trump-renewed-a-british-wind-farm-fight.html">complained to British politicians</a> about wind farms near his golf course and <a href="http://talkingpointsmemo.com/edblog/cashing-in-bigly-in-argentina">asked the Argentinian president</a> about permitting issues for a planned office building. Trump’s hotel in Washington, D.C. is <a href="https://www.theatlantic.com/politics/archive/2016/11/trump-dc-hotel-lease/509126/">leased</a> by the federal government. The Secret Service might even <a href="http://nypost.com/2016/11/24/trump-tower-security-may-take-over-2-floors-and-cost-millions/">rent space</a> in Trump Tower for security purposes.</p>
<p>That would be an overwhelming number of conflicts even for someone without Trump’s <a href="http://www.bloomberg.com/politics/articles/2016-11-18/trump-university-settles-fraud-claims-for-25-million">questionable track record</a>.</p>
<p>But unlike many <a href="http://www.wsj.com/articles/the-trump-family-political-business-1479426984">outside observers</a>, <a href="https://www.theguardian.com/us-news/2016/nov/30/donald-trump-conflicts-of-interest-business-ethics-president">ethicists</a> and the <a href="https://twitter.com/OfficeGovEthics/">government department responsible for ethics</a>, Trump doesn’t seem to grasp the enormity of the problem. In that regard, Trump may not be alone. Social science research suggests that we all tend to be blind to our own ethical failings.</p>
<h2>'I don't care about my company'</h2>
<p>Trump’s previous plan for addressing conflicts of interest was to hand the business over to his children, even though <a href="http://www.nytimes.com/2016/11/23/us/politics/trump-new-york-times-interview-transcript.html">he believed he could still</a>, in theory, run it as president.</p>
<p>In recent tweets, Trump promised to provide more information on Dec. 15 on a plan to “take [him] completely out of business operations.” This could represent a departure from the old plan or simply the implementation of the original one.</p>
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Hence, legal documents are being crafted which take me completely out of business operations. The Presidency is a far more important task! </p>— Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/mims/statuses/803931490514075648">November 30, 2016</a>
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<p>The “hand it over to kids” plan has <a href="http://www.democracy21.org/uncategorized/statement-by-norm-eisen-and-richard-painter-on-trump/">been criticized</a> as insufficient, partly because he will likely remain in contact with them and partly because he would remain <a href="http://www.theatlantic.com/business/archive/2016/11/whats-to-stop-president-trump-from-putting-his-portfolio-first/507500/">knowledgeable about the assets he owns</a>. As long as he knows about specific assets, his decisions may be influenced by his financial motives with respect to those assets.</p>
<p>President-elect Trump seems to discount the seriousness of these conflicts, suggesting they are cleansed by the sincerity of his commitment to the American public. He <a href="http://www.nytimes.com/2016/11/23/us/politics/trump-new-york-times-interview-transcript.html">told The New York Times</a>:</p>
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<p>“I don’t care about my company. It doesn’t matter. My kids run it. They’ll say I have a conflict because we just opened a beautiful hotel on Pennsylvania Avenue, so every time somebody stays at that hotel, if they stay because I’m president, I guess you could say it’s a conflict of interest… The only thing that matters to me is running our country.”</p>
</blockquote>
<p>Given the magnitude of Trump’s conflicts, and his underwhelming plan to address them, it seems hard to believe that Trump was sincere when he said he didn’t care about his business. But it is possible. The president-elect – just like the rest of us – may overestimate his own ethicality.</p>
<h2>We're all biased about ourselves</h2>
<p>As business ethics professors Max Bazerman and Ann Tenbrunsel explain in their 2011 book, <a href="http://press.princeton.edu/titles/9390.html">“Blind Spots”</a>:</p>
<blockquote>
<p>“Prior to being faced with an ethical dilemma, people predict that they will make an ethical choice. When actually faced with an ethical dilemma, they make an unethical choice.”</p>
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<p>Despite these unethical choices, people still tend to tend to think of themselves as ethical, the professors argue. In others words, we overestimate our ethical tendencies.</p>
<p><img src="http://static4.businessinsider.com/image/55d0c7912acae717448be104-2343/rtx10u4d.jpg" alt="trump family" data-mce-source="REUTERS/Andy Clark"></p>
<p>They cite <a href="https://www.google.com/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=1&amp;cad=rja&amp;uact=8&amp;ved=0ahUKEwjC2ZDpgt7QAhUGMGMKHQ4gBnYQFggcMAA&amp;url=http%3A%2F%2Ffaculty.chicagobooth.edu%2Fnicholas.epley%2FEpleyandDunning2001.pdf&amp;usg=AFQjCNGl2PFvNOXflPFKGaMSZe43vQpuqw">a study</a> in which participants were asked whether they would later buy a daffodil to support the American Cancer Society. Eighty-three percent said yes, but only about 43 percent actually did so.</p>
<p>In a related study, participants also overestimated the likelihood that they would cooperate in a “prisoner’s dilemma” scenario, where partners are rewarded for “cheating” rather than cooperating. They did, however, accurately predict the frequency with which others would cheat. In other words, we’re actually pretty good at predicting the unethical behaviors of others. We just can’t see it in ourselves.</p>
<h2>'Moral hypocrisy'</h2>
<p>It is possible that Trump is indifferent to notions of undivided loyalty. But his condemnation of the <a href="http://www.nytimes.com/interactive/2016/10/22/us/elections/clinton-trump-foundation-comparison-criticism.html?_r=0">Clinton Foundation</a> as a conduit for potential improper influence and Clinton’s paid speeches to Goldman Sachs suggests he understands the threat that conflicts pose. More likely, he considers himself immune to influence.</p>
<p>He would not be the first to overlook the conflicts at his doorstep. As Bazerman and Tenbrunsel point out, Justice Antonin Scalia <a href="http://www.pbs.org/newshour/updates/law-jan-june04-scalia_03-18-04/">famously refused</a> to recuse himself from a case that involved Dick Cheney, his friend and hunting partner. No jurist, however careful, can expect to be impartial when a personal friend is a party in the case.</p>
<p>“Moral hypocrisy” is actually a term of art in social science, referring to our tendency “<a href="https://www.google.com/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=1&amp;cad=rja&amp;uact=8&amp;ved=0ahUKEwiel9LXh97QAhVIVWMKHenpAm0QFggdMAA&amp;url=https%3A%2F%2Fvaldesolo.squarespace.com%2Fs%2Fmoral-hypocrisy.pdf&amp;usg=AFQjCNHb-eBxsEH0vf8dY3OoIzAVGA0oTA&amp;bvm=bv.1397825">to hold a belief while acting in discord with it</a>.” In <a href="https://www.google.com/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=1&amp;cad=rja&amp;uact=8&amp;ved=0ahUKEwiel9LXh97QAhVIVWMKHenpAm0QFggdMAA&amp;url=https%3A%2F%2Fvaldesolo.squarespace.com%2Fs%2Fmoral-hypocrisy.pdf&amp;usg=AFQjCNHb-eBxsEH0vf8dY3OoIzAVGA0oTA&amp;bvm=bv.1397825">one study</a>, participants were given the choice between assigning a long, boring task to another participant or risk being assigned the boring task randomly by a computer. Those who assigned the boring task to someone else rated their decision as more “fair” than a neutral observer watching the experiment.</p>
<p>In <a href="https://www.google.com/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=1&amp;cad=rja&amp;uact=8&amp;ved=0ahUKEwiF5L7Dht7QAhUOwWMKHTt1DNUQFggcMAA&amp;url=http%3A%2F%2Fwww.hbs.edu%2Ffaculty%2FPublication%2520Files%2F09-078.pdf&amp;usg=AFQjCNHtcr66Qr4hztGZYNZDT2IbLRukQA">another study</a>, participants tended to downplay the moral significance of cheating on a test after reading a hypothetical scenario in which they were the cheaters.</p>
<p><img src="http://static6.businessinsider.com/image/574f1ad252bcd01b008c643c-992/rtr34sul.jpg" alt="Donald Trump golf" data-mce-source="David Moir/Reuters"></p>
<p>Our failure to recognize our own conflicts is fueled by a related concept known as “<a href="https://www.google.com/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=1&amp;cad=rja&amp;uact=8&amp;ved=0ahUKEwiTjZfFk97QAhVP1mMKHap8D2YQFggcMAA&amp;url=http%3A%2F%2Fwww.psych.utoronto.ca%2F%7Epeterson%2Fpsy430s2001%2FKunda%2520Z%2520Motivated%2520Reasoning%2520Psych%2520Bu">motivated reasoning</a>” – our tendency to interpret facts in ways that favor the outcome we prefer. When faced with a conflict of interest that could be quite costly to address, we’re motivated to persuade ourselves that the conflict of interest isn’t so bad.</p>
<p>Trump seems to think he can will away the conflicts through sheer mental acrobatics, even as he cannot help but push his business interests in talks with foreign dignitaries.</p>
<h2>Conflicts can't be willed away</h2>
<p>Conflicts of interest aren’t about moral restraint. They are pernicious. They can operate beyond our conscious awareness. As the Supreme Court has <a href="https://supreme.justia.com/cases/federal/us/364/520/case.html">observed</a>, “an impairment of impartial judgment can occur in even the most well-meaning men when their personal economic interests are affected by the business they transact on behalf of the Government.”</p>
<p>By way of illustration, suppose that Batman or Ironman were elected president, while maintaining ownership of their business empire. Even with unquestionably good motives, could either be trusted to exclusively serve the American people? Unlikely. Not because of who they are, but the position it would put them in.</p>
<p>When it comes to conflicts of interest, Trump’s biggest weakness is not the breadth of his holdings but his overconfidence. Taking conflicts seriously requires us to admit we are human and subject to human frailty.</p>
<p>The United States <a href="https://twitter.com/OfficeGovEthics/">Office of Government Ethics</a> and the <a href="http://www.wsj.com/articles/the-trump-family-political-business-1479426984">Wall Street Journal</a> advise Trump to divest his assets. The Economist advocates a “<a href="http://www.economist.com/news/leaders/21710815-arms-length-arrangement-both-principled-and-practical-how-donald-trump-should-handle">ring-fence</a>” model that would put his assets at arm’s length.</p>
<p>These options would undoubtedly be expensive, but they wouldn’t be <a href="https://www.bloomberg.com/view/articles/2016-12-01/trump-s-business-is-not-too-big-to-sell">impossible</a>. If there were ever a time for the president-elect to defer to expert opinion, this would be it.</p>
<p><span><a href="https://theconversation.com/profiles/elizabeth-c-tippett-305207">Elizabeth C. Tippett</a>, Assistant Professor, School of Law, <em><a href="http://theconversation.com/institutions/university-of-oregon-811">University of Oregon</a></em></span></p>
<p>This article was originally published on <a href="http://theconversation.com">The Conversation</a>. Read the <a href="https://theconversation.com/why-president-elect-trump-doesnt-think-he-has-a-conflict-of-interest-problem-70006">original article</a>.</p>
<script type="text/javascript" src="https://theconversation.com/javascripts/lib/content_tracker_hook.js" id="theconversation_tracker_hook" data-counter="https://counter.theconversation.edu.au/content/70006/count?distributor=republish-lightbox-advanced" async="async"></script><p><a href="http://www.businessinsider.com/donald-trumps-conflict-of-interest-blind-spot-2016-12#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/why-boeing-747-front-hump-2016-11">Here's why Boeing 747s have a giant hump in the front</a></p> http://www.businessinsider.com/donald-trump-met-with-indian-business-partners-during-his-presidential-transition-2016-11Donald Trump met with Indian business partners during his presidential transitionhttp://www.businessinsider.com/donald-trump-met-with-indian-business-partners-during-his-presidential-transition-2016-11
Sat, 19 Nov 2016 23:34:01 -0500Michelle Mark
<p><img style="float:right;" src="http://static6.businessinsider.com/image/580f61e5362ca41d008b4885-2400/rtx2qa7v.jpg" alt="Donald Trump" data-mce-source="REUTERS/Jonathan Ernst" data-mce-caption="Donald Trump rallies with supporters in Tampa, Florida, U.S. October 24, 2016."></p><p>President-elect Donald Trump met on Tuesday with three Indian business partners who are building a Trump-branded luxury apartment project near Mumbai, the <a href="http://economictimes.indiatimes.com/news/politics-and-nation/donald-trump-meets-indian-partners-hails-pm-modis-work/articleshow/55465060.cms?utm_source=contentofinterest&amp;utm_medium=text&amp;utm_campaign=cppst">Economic Times reported</a>.</p>
<p>The meeting occurred despite Trump's promises that his business ventures will be handled by his children, so as to avoid potential conflicts of interest as he assumes the presidency.</p>
<p><span>The meeting was also reportedly attended by Trump's children, Ivanka, Eric, and Donald Jr., each of whom sits on the executive committee for Trump's presidential transition.</span></p>
<p>Trump Organization spokeswoman Breanna Butler told the <a href="http://www.nytimes.com/2016/11/20/us/politics/donald-trump-pauses-transition-work-to-meet-with-indian-business-partners.html">New York Times</a> that the meeting was a courtesy call to congratulate Trump on his election, and "was not a formal meeting of any kind."</p>
<p>Butler and Trump spokeswoman Hope Hicks both declined to comment to the Times on whether the meeting involved any talk of expanding their business partnership.</p>
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Atul &amp; Sagar Chordia, Kalpesh Mehta meets U S President Mr Donald Trump at Trump Towers New York office just now <a href="https://t.co/v7D3Uqx03d">pic.twitter.com/v7D3Uqx03d</a> </p>— DEVENDRA JAIN (@shubham9601) <a href="https://twitter.com/mims/statuses/798650633632890880">November 15, 2016</a>
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<p>But the real estate executives — Atul Chordia, Sagar Chordia, and Kalpesh Mehta — have previously <a href="https://news.housebolo.com/why-are-indian-builders-celebrating-the-rise-of-president-donald-trump/">expressed interest</a> in expanding their dealings with the Trump Organization now that Trump has been elected.</p>
<p>The meeting came two days before Trump's first visit with a foreign leader, Japanese Prime Minister Shinzo Abe. The visit <a href="http://www.businessinsider.com/afp-trumps-daughter-sits-in-on-landmark-japan-pm-talks-2016-11">drew criticism</a> after a photo was distributed showing Ivanka, who is a Trump Organization executive, sitting in on the meeting.</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/afp-trumps-daughter-sits-in-on-landmark-japan-pm-talks-2016-11" >Ivanka Trump sat in on landmark talks with Japan's prime minister</a></strong></p>
<p><a href="http://www.businessinsider.com/donald-trump-met-with-indian-business-partners-during-his-presidential-transition-2016-11#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/donald-trump-election-supporters-protests-racial-discrimination-2016-11">'Stop it!': Trump tells his supporters to end racial discrimination after the election</a></p> http://www.businessinsider.com/mexican-president-pena-nieto-florida-property-backlash-2016-8Mexico's president is in hot water over property dealings — and the backlash is fiercehttp://www.businessinsider.com/mexican-president-pena-nieto-florida-property-backlash-2016-8
Tue, 16 Aug 2016 23:43:00 -0400Christopher Woody
<p><img style="float:right;" src="http://static5.businessinsider.com/image/54aa76cceab8eae20b8dcf53-2400/ap733626278009.jpg" alt="enrique pena nieto" data-mce-source="Juan Karita/AP" data-mce-caption="Mexico's President Enrique Pena Nieto wipes sweat from his brow during a signing ceremony among the Pacific Alliance at the Climate Change Conference in Lima, Peru." /></p><p></p>
<p>Last week, <a href="https://www.theguardian.com/world/2016/aug/09/mexico-first-lady-florida-property-government-contractor-documents-reveal?CMP=share_btn_tw">The Guardian</a> reported that Angelica Rivera, the wife of Mexican President Enrique Pe&ntilde;a Nieto, had <a href="http://www.businessinsider.com/mexico-presidential-family-property-controversy-and-approval-ratings-2016-8" target="_blank">used an apartment in Florida</a> owned by a Mexican businessman who also paid the property-tax bill on her own adjacent apartment.</p>
<p>The backlash for the controversy has already reached a high pitch.</p>
<p>Members of two of Mexico's major political parties, the conservative National Action Party, or PAN, and the left-of-center Party of the Democratic Revolution, or PRD, have called for an investigation into the first lady's apartment, a unit in Ocean Tower One, in an upscale gated community in Key Biscayne, Florida.</p>
<p>Rivera purchased her apartment in 2005, and it is located a floor below the apartment purchased several years later by Ricardo Pierdant, who <a href="http://www.univision.com/shows/noticiero-univision/nuevo-escandalo-para-el-presidente-de-mexico-y-su-esposa-video" target="_blank">knows the president</a> and owns Grupo Pierdant, a Mexican firm.</p>
<p>Legislators from PAN have <a href="http://www.wsj.com/articles/mexico-president-faces-new-scrutiny-1470965694" target="_blank">requested</a> that federal auditors and the country's comptroller's office look into whether businesses owned by Pierdant have worked with the federal government in the past.</p>
<p>The Mexican public has also joined in. A petition on Change.org with more than <a href="https://www.change.org/p/fiscalia-anticorrupcion-la-otra-casa-blanca" target="_blank">86,000 signatures</a> <span style="line-height: 1.5em;">&mdash; titled "</span><a href="https://www.change.org/p/fiscalia-anticorrupcion-la-otra-casa-blanca" target="_blank">The Other White House</a><span style="line-height: 1.5em;">," in reference to </span><a href="http://www.businessinsider.com/enrique-pena-nieto-property-ownership-scandal-2015-5#ixzz3hUAOJD6z" target="_blank">a previous property controversy</a><span style="line-height: 1.5em;"> involving the first family &mdash; calls for the anticorruption prosecutor's office to investigate Rivera.</span></p>
<p><img src="http://static1.businessinsider.com/image/57ade07edb5ce91d008b6611-1290/screen shot 2016-08-12 at 10.39.17 am.png" alt="Ocean Tower One Miami Florida" data-mce-source="Google Maps" data-mce-caption="Ocean Club Tower One, center, in Key Biscayne, Florida." /></p>
<p>Other observers have noted that the scandal again calls attention to the poor way Mexican politicians handle potential conflicts of interest.</p>
<p><span>"It reignites the discussion over the links that the president and his wife have with businessmen, particularly the type of relation that they could have with someone who pays your property taxes," Eduardo Bohorquez, who leads the Mexico office of Transparency International, <a href="http://www.wsj.com/articles/mexico-president-faces-new-scrutiny-1470965694" target="_blank">told</a> The Wall Street Journal last week.</span></p>
<p><span>"The wife of the president of Mexico cannot receive special favors that involve hundreds of thousands of pesos ... without first receiving authorization" from the presidential legal counsel, the columnist Salvador Camarena <a href="http://www.elfinanciero.com.mx/opinion/la-danina-telenovela-de-enrique-y-angelica.html" target="_blank">wrote</a> in El Financiero on Saturday. </span></p>
<p><span>"The president of the republic cannot accept favors that his friends lavish on him, his wife, their children, their siblings or their collaborators that involve thousands of dollars," Camarena <a href="http://www.elfinanciero.com.mx/opinion/la-danina-telenovela-de-enrique-y-angelica.html" target="_blank">added</a>.</span></p>
<p><img src="http://static5.businessinsider.com/image/55bcf8fe371d22dd2e8bae48-2400/rtx1kl8o.jpg" alt="Enrique Pena Nieto" data-mce-source="REUTERS/Philippe Wojazer" data-mce-caption="French President Francois Hollande welcomes Mexico's President Enrique Pena Nieto and his wife Angelica Rivera for a dinner at the Elysee Palace in Paris, France, July 16, 2015." /></p>
<p>The president's office and the contractor involved have made efforts to explain away the appearance of impropriety, but it is unlikely that their justifications will sway a public that is used to malfeasance among the political class.</p>
<p>Pierdant has even said that Rivera <a href="http://www.sdpnoticias.com/nacional/2016/08/10/los-departamentos-no-estan-comunicados-hice-el-tramite-del-predial-y-angelica-me-reembolso-pierdant" target="_blank">asked him</a> to make the property-tax payment on her property and that she reimbursed him for the expense. This explanation, however, came after Pierdant told Univision it was "<a href="http://www.businessinsider.com/mexico-presidential-family-property-controversy-and-approval-ratings-2016-8" target="_blank">totally false</a>" that he had paid property taxes for the apartment that she owned.</p>
<p>Spokesmen for Pe&ntilde;a Nieto <a href="http://www.wsj.com/articles/mexico-president-faces-new-scrutiny-1470965694" target="_blank">said</a> that Rivera had only rarely used Pierdant's apartment and that there was no conflict of interest because Pierdant was not currently bidding on government contracts. A spokesman also <a href="http://www.wsj.com/articles/mexico-president-faces-new-scrutiny-1470965694" target="_blank">denied</a> that the two apartments were connected and shared a telephone number.</p>
<p>The spokesman said the president hadn't used the businessman's property since he was elected in 2012 &mdash; but <a href="http://www.wsj.com/articles/mexico-president-faces-new-scrutiny-1470965694" target="_blank">couldn't say</a> whether he had used it before that.</p>
<p><span>In an <a href="http://www.proceso.com.mx/451129/amigo-pago-predial-del-departamento-angelica-en-miami-pena-nieto" target="_blank">interview</a> this week with Mexican journalist Joaqu&iacute;n L&oacute;pez D&oacute;riga, the president tried to downplay the controversy. He said his wife did not have another property in Miami and acknowledged that Pierdant, who Pe&ntilde;a Nieto did not mention by name, lived in the building but did not have any contracts with the Mexican government.</span></p>
<p><span><img style="float:right;" src="http://static4.businessinsider.com/image/577fcc284321f1362f8b64c3-2400/rtx1w1e9.jpg" alt="Mexico Guerrero Ayotzinapa protest crime" data-mce-source="REUTERS/Daniel Becerril" data-mce-caption="A woman holds a skull during a march marking 14-month anniversary of the disappearance of the students from Ayotzinapa College Raul Isidro Burgos, in Mexico City, Mexico, November 26, 2015. Hundreds of activists marched on Thursday in Mexico City to demand justice for 43 students who disappeared over a year ago in the southwestern state of Guerrero. The skull reads&amp;quot Justice&amp;quot and the words on right read &amp;quotPena out,&amp;quot referring to Mexico's President Enrique Pena Nieto." /></span></p>
<p><span>As to the property-tax payment, Pe&ntilde;a Nieto denied any sinister goings-on.</span></p>
<p><span>"He is a friend who is there and who effectively did her a favor. The only occasion in 11 years that she has the property, in the only occasion because my wife was here and she asked him, 'Hey, can you cover the property tax? I will cover it for you here,'" meaning she would pay him back, Pe&ntilde;a Nieto <a href="http://www.proceso.com.mx/451129/amigo-pago-predial-del-departamento-angelica-en-miami-pena-nieto" target="_blank">said</a>.</span></p>
<p>"As in fact it occurred," the president added.</p>
<p><span><span>The controversy over the Miami properties is only the latest such scandal. </span></span></p>
<p><span><span>Previous reports have found that Pe&ntilde;a Nieto seemed to <a href="http://www.businessinsider.com/mexico-presidential-family-property-controversy-and-approval-ratings-2016-8" target="_blank">misrepresent</a> how he had acquired property outside Mexico City on tax forms and, in another instance, that Rivera, his wife, was attempting to buy a home in an upscale Mexico City neighborhood from a contractor with close ties to Pe&ntilde;a Nieto &mdash; the <a href="http://www.businessinsider.com/mexico-presidential-family-property-controversy-and-approval-ratings-2016-8" target="_blank">so-called Casa Blanca</a> scandal.</span></span></p>
<p>In a Reforma poll done before The Guardian's report, Pe&ntilde;a Nieto's approval rating had slipped to 23%, the lowest for any Mexican president since the newspaper started doing the survey <a href="http://www.wsj.com/articles/mexico-president-faces-new-scrutiny-1470965694" target="_blank">in 1995</a>, according to The Journal.</p>
<p><span><span>That poll also found that 55% of respondents believed corruption at the federal level had gotten worse &mdash; up from 40% in April.</span></span></p>
<p><span><span><em>Editor's note: The original Guardian report suggested that Pierdant's potential bidding on a Mexican government contract raised the possibility of a conflict of interest. However, on September 16, 2016, <a href="https://www.theguardian.com/news/2016/sep/16/corrections-and-clarifications" target="_blank">The Guardian acknowledged</a> that neither Pierdant nor&nbsp;his companies had gotten any government contracts nor bid on them and took down its report. This post has been edited to reflect that correction.</em></span></span></p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/mexico-presidential-family-property-controversy-and-approval-ratings-2016-8" >Mexico's presidential family is involved in more controversial property dealings — and his approval rating has plummeted</a></strong></p>
<p><a href="http://www.businessinsider.com/mexican-president-pena-nieto-florida-property-backlash-2016-8#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/mexico-volcano-eruption-science-2016-4">Watch a volcano in Mexico violently erupt and spew a mile-high ash cloud</a></p> http://www.businessinsider.com/holders-law-firm-a-shadow-justice-department-2015-8Eric Holder's corporate law firm is turning into a 'shadow Justice Department'http://www.businessinsider.com/holders-law-firm-a-shadow-justice-department-2015-8
Wed, 26 Aug 2015 18:45:00 -0400Avi Asher-Schapiro
<p><img style="float:right;" src="http://static6.businessinsider.com/image/5209369569bedd580f000003-4398-3096/ap457015297816.jpg" alt="Eric Holder" data-mce-source="AP"></p><p>The revolving door between the Department of Justice and a certain corporate law firm is spinning faster than ever. On July 6, former Attorney General Eric Holder returned to his previous employer, Covington &amp; Burling — a firm that's represented the biggest banks on Wall Street, and is internationally known for its white-collar defense practice. A week later, his DOJ chief of staff Margaret Richardson announced that she would be following him there.</p>
<p>Meanwhile, the latest data from the DOJ <a href="http://trac.syr.edu/tracreports/crim/398/" target="_blank">reveals</a> that criminal prosecutions for white-collar crimes are at a 20-year low. This decline and the rapid circulation of personnel between Covington and the DOJ has raised questions about the Obama administration's handling of the banking industry and the 2008 financial crisis. <br><span></span></p>
<p>Under Obama, the DOJ decided not to pursue <a href="http://www.wsj.com/articles/holder-sets-deadline-for-financial-crisis-cases-against-individuals-1424215598" target="_blank">criminal charges</a> against most of the executives and financial institutions behind the economic collapse, opting instead to impose hefty fines that were paid out by shareholders, not the employees or executives of the banks. In contrast, some 1,100 individuals faced criminal prosecution during the savings and loan crisis of the 1980s, and the heads of several major banks served jail time.</p>
<p>"I'm not accusing anyone of anything specific, but we're looking at a gigantic built-in conflict of interest revolving in and out of the attorney general's office," Ted Kaufman, a former Delaware senator who went on to chair the Congressional Oversight Panel tasked with monitoring the $700 billion bailout of the financial industry during the crisis, told VICE News.</p>
<p>When lawyers shuffle back and forth between prosecuting and defending white-collar criminals, he said, it makes observers wonder "whether the laws are the same for everyone."</p>
<p>A spokesperson for Covington told VICE News that the firm has "a strict conflicts check process," which it does not discuss in public, adding that its recruitment of former government officials is something it is "most proud of." Holder and Richardson declined to comment.</p>
<p>The Public Accountability Initiative, a nonprofit research organization, has prepared an<a href="http://littlesis.org/maps/930-the-shadow-doj/raw" target="_blank">interactive map</a> that charts many of the connections between the DOJ and Covington. It includes not only their white-collar defense division, but dozens of other lawyers who have circulated between the firm and the Justice Department.</p>
<p><img src="http://static1.businessinsider.com/image/519cc230eab8eadb7f00000c-5644-3935/ap91350949898.jpg" alt="Barack Obama Eric Holder" data-mce-source="AP"></p>
<p>Some media outlets and commentators have begun referring to Covington as a "shadow Justice Department" — a place for talented lawyers to become familiar with how corporations work before entering public service, and a landing pad for former federal prosecutors transitioning to the private sector.</p>
<p>Holder worked at Covington for eight years before Obama tapped him to lead the DOJ in 2009. Plotting his return to the fold became a six-year "project," Covington chairman Timothy Hester <a href="http://www.nationallawjournal.com/id=1202731265593/Holders-Return-to-Covington-Was-Six-Years-in-the-Making?slreturn=20150630163324" target="_blank">told</a> the <em>National Law Journal</em>. The firm even reserved a vacant corner office for Holder's expected return.</p>
<p>"It's not coincidence that the higher up you are at the DOJ, when you leave, the more prestigious or elite the law firm you land at," Bartlett Naylor, a former chief of investigations for the US Senate Banking Committee, told VICE News. Naylor now works as a policy advocate for the public interest group Public Citizen, where he monitors the influence of money in politics.</p>
<p style="padding-left: 30px;"><em>Are we going to operate under the assumption that attorneys at DOJ who are leaving for high-paying jobs in the private sector aren't going to be influenced by their financial connections? It's absurd to try to make that case.'</em></p>
<p>Covington's white-collar defense division, which represents clients accused of corporate, financial, or regulatory crimes, is particularly well stacked with government talent.</p>
<p>"Our team includes former senior SEC officials, a former Secretary of Homeland Security, three former heads of the Justice Department's Criminal Division, former federal judges, numerous former federal prosecutors with extensive criminal trial experience, as well as former senior Treasury Department, State Department, and EU officials," boasts the firm's white-collar defense and investigations <a href="https://www.cov.com/en/practices/white-collar-and-investigations" target="_blank">web page</a>.</p>
<p>Holder and Richardson have joined five other top DOJ lawyers who left government to work in the lucrative division.</p>
<p><div>
<iframe height="400" width="800" scrolling="no" style="border: 0px; overflow: hidden;" src="http://littlesis.org/maps/931-covington-and-burling/raw?embed=true&amp;zoom=0.293"></iframe><div style="padding: 5px;"><a href="http://littlesis.org/maps/931-covington-and-burling">view this map on LittleSis</a></div>
</div></p>
<p class="embed-spacer">It's easy to see that DOJ prosecutors move in the same circles as the financial firms they are supposed to prosecute, but it's much more difficult to identify specific conflicts of interest. While Covington's current client list is not public, the firm has previously represented Bank of America, Citigroup, JPMorgan Chase, Morgan Stanley, and it is currently registered as a lobbyist for Wells Fargo. All of these institutions were under scrutiny for their role in circulating the toxic mortgages that triggered the 2008 financial crash.</p>
<p>Lanny Breuer, the firm's current vice chairman, was in charge of financial fraud prosecution in the Obama administration until 2012. Like Holder, Breuer also worked at Covington before joining Obama's DOJ. Under Breuer, the DOJ did not bring a single criminal case against big banks or other companies involved in mortgage servicing, even though "copious evidence has surfaced of apparent criminal violations in foreclosure cases," according to <a href="http://www.reuters.com/article/2012/01/20/us-usa-holder-mortgage-idUSTRE80J0PH20120120" target="_blank">an investigation</a> by Reuters.</p>
<p>Reuters was referring to thousands of documents that were forged by bank employees during the foreclosure crisis. Before the crash, Covington helped Fannie Mae, Freddie Mac, Bank of America, and JPMorgan create an entity called Mortgage Electronic Registry Systems, Inc. (MERS), which established a digital catalog of mortgages. MERS was later accused of drawing up fake mortgage assignments and fabricating documents in order to file illegal foreclosures on people's homes. </p>
<p>Breuer's defenders say that proving criminal liability would have been nearly impossible, given the complex and diffuse nature of decision-making at modern financial firms. Instead, Holder and Breuer's strategy at DOJ was the pursuit of settlements that forced financial institutions to settle charges of wrongdoing by paying hefty fines — some amounting to billions of dollars — while not admitting to having broken the law.</p>
<p>Critics of this strategy, such as Kaufman and Public Citizen, suggest that the practice of seeking fines rather than criminal convictions reflects the cozy relationship between the attorney general's office and corporate law firms. <a href="http://www.nybooks.com/articles/archives/2014/jan/09/financial-crisis-why-no-executive-prosecutions/" target="_blank">Others</a> counter that pursuing criminal charges would have spread the DOJ thin during a budget crunch and that the multi-billion dollar settlements nevertheless allowed the DOJ to penalize bad behavior and deter it in the future.</p>
<p style="padding-left: 30px;"><em>What's shocking in Washington isn't what's illegal, but the sort of stuff that's legal.'</em></p>
<p>Peter Schweizer, the president of the conservative Government Accountability Institute, told VICE News that Covington has long cultivated lawyers like Holder to help their Wall Street clients avoid prosecution.</p>
<p>"If you're a large bank and you want to stay out of the crosshairs of the DOJ, who are you going to hire — someone who's been in the private sector, or a DOJ guy?" he asked. "You go with the DOJ guy."</p>
<p><img src="http://static4.businessinsider.com/image/53fce2caecad04d1588b4567-4896-3264/eric%20holder%20getty.jpg" alt="eric holder getty" data-mce-source="Getty/Alex Wong" data-mce-caption="U.S. Attorney General Eric Holder."></p>
<p>Still, the movement of lawyers between Covington and the DOJ is not illegal and does not in itself constitute a technical breach of professional ethics. Bruce Green, the director of the Stein Center for Law and Ethics at the Fordham University School of Law, told VICE News that as long as lawyers like Holder and Breuer stay away from specific cases where their previous government work would present a conflict of interest, there shouldn't be a problem.</p>
<p>Green thinks it is highly unlikely that attorneys of that caliber would put themselves in legal or ethical gray zones — "Lawyers who care about their professional reputation aren't going to entertain something like that," he remarked — but he noted that because the firms are not required to disclose their current clients, potential conflicts of interest are essentially self-regulated.</p>
<p>"If you're a former DOJ official now in private practice, there's not going to be an ethical policeman sitting over your shoulder," he said.</p>
<p>Critics of the revolving door are skeptical that an ethical framework that relies heavily on self-policing will be inadequate.</p>
<p>"What's shocking in Washington isn't what's illegal, but the sort of stuff that's legal," Schweitzer said. "Are we going to operate under the assumption that attorneys at DOJ who are leaving for high-paying jobs in the private sector aren't going to be influenced by their financial connections? It's absurd to try to make that case."</p>
<p><span></span>The Office of the Inspector General, which investigates conflicts of interest and misconduct in the DOJ, would not comment on complications that could arise from the close association between Covington and DOJ veterans. But a 2014 Inspector General <a href="http://dealbook.nytimes.com/2014/03/13/u-s-overstates-efforts-to-prosecute-mortgage-fraud-watchdog-says/" target="_blank">report</a> asserted that prosecuting mortgage fraud — the primary white-collar crime that triggered the financial crisis — was a low priority under Holder, with hundreds of cases closed without prosecution and resources diverted to other areas.</p>
<p>Lawyers who move freely between white-collar defense and white-collar prosecution could conceivably be more likely to sympathize with institutions or individuals accused of financial crimes. A DOJ prosecutor that has close connections to the financial industry, Naylor said, might think that "these are his people" — a sense that could play into his approach to a criminal case.</p>
<p>To illustrate his point, Naylor pointed to statements made by Breuer and Holder in which they expressed sympathy with the big banks and their employees.</p>
<p>"In reaching every charging decision, we must take into account the effect of an indictment on innocent employees and shareholders," Breuer remarked in 2012. "Those are the kinds of considerations in white-collar crime cases that literally keep me up at night."</p>
<p>In an interview with the <em>Financial Times</em> conducted after he left the DOJ, Holder seemed to echo this sentiment. He defended his decision not to seek high-level criminal prosecutions, arguing that large financial settlements were preferable to "trying to make examples of people" with jail time.</p>
<p>Ted Kaufman said he was "shocked" to hear Holder's comments.</p>
<p>"I thought what we tried to do under our criminal justice system was to catch people who broke the law, and to make an example out of them so others would think twice about doing the same," he said. "It's clear something serious has to be done about the revolving door."</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/donald-trump-ejected-a-prominent-journalist-from-a-press-conference-2015-8#ixzz3jssPRRDS" >Donald Trump just stunned political observers by ejecting a prominent Univision anchor from his press conference</a></strong></p>
<p><a href="http://www.businessinsider.com/holders-law-firm-a-shadow-justice-department-2015-8#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/trump-supporters-are-mad-as-hell-2015-8">The truth about Donald Trump​ supporters: They're MAD AS HELL and not going to take it anymore!</a></p> http://www.businessinsider.com/ceo-golf-rounds-indicate-poor-performance-2014-11The Truth Comes Out About CEOs Who Play Too Much Golf (DIA, SPY, QQQ, TLT, IWM)http://www.businessinsider.com/ceo-golf-rounds-indicate-poor-performance-2014-11
Sun, 23 Nov 2014 11:00:00 -0500Myles Udland
<p><img style="float:right;" src="http://static4.businessinsider.com/image/53d137406da8113f4de6ede9-843-632/bill-murray-golf-disappointed-sad-distress.png" border="0" alt="bill murray golf disappointed sad distress"></p><p>Here's something people associate with bigwig CEOs: golf.&nbsp;</p>
<p>But there's a problem: If your company's CEO golfs a lot, your company is probably underperforming.</p>
<p>A paper from Lee Biggerstaff at Miami University (Ohio), David C. Cicero at the University of Alabama, and Andy Puckett at the University of Tennessee&nbsp;<a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2495105">published in August</a>&nbsp;(which we were first alerted to by&nbsp;<a href="https://twitter.com/matt_levine/status/534731474940207104">Bloomberg's Matt Levine</a>) looks at the relationship between CEOs who play lots of golf and the performance of those CEOs' companies.</p><p><a href="http://www.businessinsider.com/ceo-golf-rounds-indicate-poor-performance-2014-11#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/ceo-golf-rounds-indicate-poor-performance-2014-11The Truth Comes Out About CEOs Who Play Too Much Golf (DIA, SPY, QQQ, TLT, IWM)http://www.businessinsider.com/ceo-golf-rounds-indicate-poor-performance-2014-11
Tue, 18 Nov 2014 12:08:00 -0500Myles Udland
<p><img style="float:right;" src="http://static4.businessinsider.com/image/53d137406da8113f4de6ede9-843-632/bill-murray-golf-disappointed-sad-distress.png" border="0" alt="bill murray golf disappointed sad distress"></p><p>Here's something people associate with bigwig CEOs: golf. </p>
<p>But there's a problem: If your company's CEO golfs a lot, your company is probably underperforming.</p>
<p>A paper from Lee Biggerstaff at Miami University (Ohio), David C. Cicero at the University of Alabama, and Andy Puckett at the University of Tennessee <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2495105">published in August</a> (which we were first alerted to by <a href="https://twitter.com/matt_levine/status/534731474940207104">Bloomberg's Matt Levine</a>) looks at the relationship between CEOs who play lots of golf and the performance of those CEOs' companies.</p>
<p><span style="font-size: 15px; line-height: 1.5em;">The findings are not in favor of the golfers. </span></p>
<p><span style="font-size: 15px; line-height: 1.5em;">The authors said they were seeking to learn how company performance related to CEOs spending time away from their companies. They settled on golf as a proxy for leisure, or a way to measure how much the CEO was "shirking" responsibilities at the company. </span></p>
<p><span style="font-size: 15px; line-height: 1.5em;">The authors write that they chose golf because "a plurality of CEOs list golf as their preferred outlet for leisure and because golf commands a significant time commitment."</span></p>
<p><span style="font-size: 15px; line-height: 1.5em;">To conduct this research, the authors hand-collected (!) golfing records for 363 S&amp;P 1500 CEOs from a USGA database containing records for each round recorded in the system by golfers from 2008 to 2012. </span></p>
<p><span style="font-size: 15px; line-height: 1.5em;">Here are some of the highlights of the paper's findings:</span></p>
<ul>
<li>Companies with CEOs in the top quartile of golf play (22 rounds or more per year) have lower operating performance and firm values.</li>
<li>Some CEOs in the database played more than 100 rounds in a year! (There are 365 days in a year.)</li>
<li>"While some golf rounds may serve a valid business purpose, it is unlikely that the amount of golf played by the most frequent golfers is necessary for a CEO to support her firm."</li>
<li>CEOs play more golf the longer they are the CEO.</li>
<li>The number of golf rounds a CEO plays is negatively correlated with changes in firm profitability. </li>
<li>Overall, higher golf play is associated with a higher probability of CEO turnover.</li>
<li>One CEO played 146 rounds of golf in a year.</li>
</ul>
<p>Among the other choice bits of info from the report is that Jimmy Cayne, the former CEO of Bear Stearns, spent 10 of 21 working days away from the office playing golf or bridge in July 2007, the same month that two Bear Stearns hedge funds collapsed. (That info is gleaned from a <a href="http://online.wsj.com/articles/SB119387369474078336">report in The Wall Street Journal</a> by Kate Kelly.)</p>
<p>As we've highlighted recently in writing about the "<a href="http://www.businessinsider.com/wall-street-analyst-conflict-study-november-4-2014-11">revolving door</a>" issue that affects some Wall Street analysts, numerous things <em>seem </em>weird about Wall Street or the business world but are sort of hard to prove. </p>
<p>This paper takes steps toward proving something lots of people might have a hunch about.</p>
<p>If you went up to someone on the street and asked what a CEO has to do, it doesn't seem unlikely that you'd get a response like "play golf with clients."</p>
<p>And while on some level entertaining clients — or keeping clients happy, or making appearances on behalf of your company — is part of what comes with being a CEO, playing golf almost every other day is (probably) not in the job description. </p>
<p>But if you play lots of golf and then get fired as a CEO for doing so, I guess you could just go play more golf. </p>
<p>So, win-win?</p>
<p>We've embedded the whole paper below.</p>
<div><div>
<p style=" margin: 12px auto 6px auto; font-family: Helvetica,Arial,Sans-serif; font-style: normal; font-variant: normal; font-weight: normal; font-size: 14px; line-height: normal; font-size-adjust: none; font-stretch: normal; -x-system-font: none; display: block;"> <a title="View CEO Golf research on Scribd" href="https://www.scribd.com/doc/246999882/CEO-Golf-research" style="text-decoration: underline;">CEO Golf research</a></p>
<iframe class="scribd_iframe_embed" src="https://www.scribd.com/embeds/246999882/content?start_page=1&amp;view_mode=scroll&amp;show_recommendations=true" data-auto-height="false" data-aspect-ratio="undefined" scrolling="no" id="doc_24453" width="100%" height="600" frameborder="0"></iframe>
</div></div><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/most-important-charts-in-the-world-q4-2014-10" >Wall Street's Brightest Minds Reveal The Most Important Charts In The World</a></strong></p>
<p><a href="http://www.businessinsider.com/ceo-golf-rounds-indicate-poor-performance-2014-11#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/wall-street-analyst-conflict-study-november-4-2014-11Wall Street Has A Disturbing Revolving Door Problemhttp://www.businessinsider.com/wall-street-analyst-conflict-study-november-4-2014-11
Sun, 09 Nov 2014 10:30:00 -0500Myles Udland
<p>Wall Street's equity analysts provide investors with research notes that typically include profit forecasts for companies. They also include recommendations on whether to buy or sell a company's stock.</p>
<p>However, the nature of these analysts' work often exposes them to all sort of conflicts of interest.<span><br></span></p><p><a href="http://www.businessinsider.com/wall-street-analyst-conflict-study-november-4-2014-11#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/spokeswoman-for-eus-foreign-policy-chief-married-to-gazprom-lobbyist-2014-11One High-Ranking EU Official Has A Huge Potential Conflict Of Interest In Dealing With Russiahttp://www.businessinsider.com/spokeswoman-for-eus-foreign-policy-chief-married-to-gazprom-lobbyist-2014-11
Fri, 07 Nov 2014 13:55:00 -0500Robert Coalson
<p><img src="http://static1.businessinsider.com/image/545d1347ecad04ce7323d9ac-600-/gazprom-13.jpg" border="0" alt="gazprom" width="600"></p><p><span style="line-height: 1.5em;">The&nbsp;lead&nbsp;spokeswoman&nbsp;for&nbsp;newly&nbsp;installed EU foreign policy chief Frederica Mogherini is married to&nbsp;a&nbsp;partner in a Brussels public&nbsp;relations firm that lobbies for&nbsp;Russian state-owned natural-gas monopoly Gazprom.</span></p>
<p>Spokesperson Catherine Ray married Thomas Barros-Tastetsin France on October 19, 2013. Barros-Tastets is a partner in the Brussels branch of the G+ lobbying firm. His <a href="http://www.gplusbrussels.eu/en/people/thomas-barros-tastets.php" target="_blank">online biography</a> states that he "helps to coordinate the European part of a worldwide consortium which advises a major international energy company on communications and public affairs."</p>
<p>Although the "major international energy company" is not named, Barros-Tastets is <a href="http://issuu.com/ebreview/docs/ebr_03_2013/35" target="_blank">frequently referenced</a> in the media as "a consultant in European public affairs for Gazprom."&nbsp;An August 2013 announcement that he was appointed a partner at G+ states that he "is an adviser to Gazprom in its dealings with the EU competition authorities."</p>
<p>The EU's <a href="http://ec.europa.eu/transparencyregister/public/consultation/displaylobbyist.do?id=7223777790-86&amp;isListLobbyistView=true" target="_blank">Transparency Register</a> lists "Diversified Energy Communications (for Gazprom Export)" as one of G+'s major clients, generating annual turnover of between 300,000 and 350,000 euros. Barros-Tastets is listed there as one of the firm's employees "accredited for access to European Parliament premises."</p>
<p>Barros-Tastets was seen in the company of Russian Energy Minister Aleksandr Novak in Brussels on October 29, when Novak was in town for gas negotiations with EU and Ukrainian officials.</p>
<p>Margaritis Schinas, the chief spokesman of the European Commission, who participated in the process of vetting Ray for her position, told RFE/RL in written comments that Ray informed the EU about her husband's professional activities, including his work for Gazprom.</p>
<p>"Ray followed the ethics procedure as requested by the European Commission," he wrote. He added that Mogherini "was involved" in the process of selecting Ray, but did not nominate Ray.</p>
<p>Schinas noted that Ray is charged with "speaking on Africa, Latin America, and Gulf countries." Fellow foreign affairs spokeswoman Maja Kocijancic speaks for Mogherini on European affairs, including Russia.</p>
<p>"We therefore do not believe there is a potential conflict of interest with…Ray's duties at the commission," Schinas wrote.</p>
<p>Ray declined requests to comment for this article.</p>
<p><img class="full" src="http://static2.businessinsider.com/image/541180c2ecad046f0b25dd35-840-605/gazprom-8.jpg" border="0" alt="gazprom">Former Italian Foreign Minister Frederica Mogherini was a controversial choice to replace Catherine Ashton as the European Union's foreign policy chief. Critics viewed her as politically inexperienced and, possibly, too willing to make accommodations to Russia's Vladimir Putin.</p>
<p>"I was particularly worried by what seemed to be her blind spot toward Putin," says Edward Lucas, senior editor for energy, commodities, and natural resources at The Economist, who argued against Mogherini's candidacy on social media during the summer. "She seemed to like Putin, to get on with him, and to not really see the world from the&nbsp;perspective of the European Union countries neighboring Russia."</p>
<p>Lucas and other EU watchers argued that the foreign policy post should go to someone from Central Europe such as Radek Sikorski, the current speaker of Poland's parliament who was then the country's foreign minister.</p>
<p>Mogherini, 41, is a relatively inexperienced politician who was picked by Italian Prime Minister Matteo Renzi as foreign minister in February. Just a few months later, Renzi lobbied strenuously and successfully in the EU to have her replace Ashton.</p>
<p>Renzi was the only EU head of government who argued against further sanctions on Russia for its actions in Ukraine at the EU summit in Brussels in October. Renzi has also lobbied in support of the Gazprom-backed South Stream gas-pipeline project that would supply Russian gas to Italy and other EU countries via Greece, Bulgaria, Serbia, and Romania.</p>
<p><span style="line-height: 1.5em;">The European Commission ruled in December 2013 that the intergovernmental agreements with Russia on the construction of the pipeline were all in violation&nbsp;of EU regulations on competition and nondiscriminatory access of third parties.</span></p>
<p>The&nbsp;European Union has set itself the goal of reducing its dependence on Gazprom. The EU receives approximately one-third of its gas from Russia.</p>
<p>Catherine Ray has been working in communications for the EU since 2000, as well as a brief stint at the United Nations Development Program in 2007-08. She has served as spokeswoman for EU commissioners Pascal Lamy, Janez Potocnik, and Andris Piebalgs.</p>
<p><em>RFE/RL's Katarina Solikova contributed to this report</em></p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/the-history-of-the-cold-war-in-40-quotes-2014-11" >The entire history of the Cold War — in 40 quotes</a></strong></p>
<p><a href="http://www.businessinsider.com/spokeswoman-for-eus-foreign-policy-chief-married-to-gazprom-lobbyist-2014-11#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/wall-street-analyst-conflict-study-november-4-2014-11Wall Street Has A Disturbing Revolving Door Problemhttp://www.businessinsider.com/wall-street-analyst-conflict-study-november-4-2014-11
Wed, 05 Nov 2014 13:04:00 -0500Myles Udland
<p><img style="float:right;" src="http://static1.businessinsider.com/image/5459328069bedd3c285b97c1-1200-924/revolving_door-base.jpg" alt="revolving door" border="0"></p><p>Wall Street's equity analysts provide investors with research notes that typically include profit forecasts for companies. They also include recommendations on whether to buy or sell a company's stock.</p>
<p>However, the nature of these analysts' work often exposes them to all sort of conflicts of interest.<span><br></span></p>
<p><span style="font-size: 15px; line-height: 1.5em;">A lot of the reason people listen to Wall Street analysts is that they get more access to company management than almost anybody else. Analysts who have negative ratings on companies, however, risk not either getting this access, or <a href="http://www.businessinsider.com/cliffs-natural-ceo-calls-out-wells-fargo-analyst-2014-10">getting the cold shoulder from management</a>. This conflict tends to encourage analysts to assign favorable ratings to companies.<br></span></p>
<p><span style="font-size: 15px; line-height: 1.5em;">But conflicts can get much deeper, and even disturbing.<br></span></p>
<p><span style="font-size: 15px; line-height: 1.5em;">A <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2517957">new paper from Ben Lourie of UCLA</a> (via <a href="https://twitter.com/matt_levine/status/529695806069407744">Matt Levine</a>) explores an what's called the "revolving-door" phenomenon. <br></span></p>
<h2>The Revolving-Door Phenomenon</h2>
<p><span style="font-size: 15px; line-height: 1.5em;">The revolving-door phenomenon is a concept that explores the idea that sell-side analysts who are more bullish on a company they cover are more likely to be hired by that company. </span></p>
<p><span style="font-size: 15px; line-height: 1.5em;">And Lourie's analysis finds that, essentially, this is the case.</span></p>
<p><span style="font-size: 15px; line-height: 1.5em;">Lourie finds that analysts who went to work for a company they covered as an analyst had higher price targets on the company's stock, more optimistic recommendations about the company, a more pessimistic view about their competitors' prospects, and issued more reports than other analysts in the year before joining the firm. </span></p>
<p>As Lourie writes, "The findings raise concerns about their independence and indicate a potential benefit to tightening employment regulations in this industry." </p>
<p>You don't say. </p>
<p>And another potential conflict Lourie addresses is that, despite rules outlined in Reg FD and myriad other financial regulations, there is no law requiring that analysts have any "cooling off" period between covering a company and joining that company as an employee.</p>
<p>Lourie finds that the only FINRA regulation specifically addressing this problem states that when "a research analyst is pursuing employment or has accepted a job with a covered company, NASD rules require that information concerning such a clear conflict of interest must be disclosed in research reports."</p>
<p>So basically, were I an equity analyst covering Company X, I could publish lots of insanely bullish forecasts and, unless I <em>knew</em> I was going to work there, and not just not-so-subtlely making clear to the company that I <em>wanted </em>to work there, I wouldn't have to add additional disclosures to my research.</p>
<p>And only once has an analyst been charged with violating this regulation. (That analyst was fined $12,500, which as Lourie writes, is a "small deterrent to future analysts who might be tempted to make themselves more attractive" as potential employees.)</p>
<h2>Three Possibilities</h2>
<p>In his paper, Lourie explore three possible explanations for why an analyst could be attractive to a company as an employee, aside from just like, you know, sucking up to them.</p>
<p>The first possibility is that companies identify analysts who provide more accurate earnings per share forecasts and hire those analysts; "revolving-door" analysts are, in fact, on average, less accurate than other analysts.</p>
<p>The second possible explanation is that there is some inherent quality in certain analysts that companies look for in future employees. Lourie finds, however, that analysts who spend at least one year in another job before going to work for a firm they previously covered as an analyst display no change in their behavior during the final year as an analyst. </p>
<p>Finally, Lourie looks to see if hired analysts are, in general, more optimistic about the company than other analysts.</p>
<p>"While the true opinion of the analyst is non-observable," Lourie writes, "the fact that the change in the analyst behavior occurs in the year just prior to their move to the covered firms makes this explanation less likely."</p>
<p>So the answers are basically no, no, and no.</p>
<h2>About Those EPS 'Beats'</h2>
<p>We are slowly coming out of the heart of earnings season. This is the period when thousands of companies report earnings within a few weeks of one another and then everybody gets to make big pronouncements about the health of a company, an industry, or the global economy based on a quarter's worth of financial performance. </p>
<p>And as a company, the best thing you can say is that you "beat" expectations. This can mean reporting earnings per share (EPS) of $4 against expectations for $1, or EPS of $1 against expectations for $0.99.</p>
<p>Report EPS 300% above expectations? Beat. Reports EPS 1% above expectations? Beat. </p>
<p>Either way, you're a winner!</p>
<p>And what Lourie found is that companies that hire former analysts in an investor relations function have a "higher propensity to slightly beat the consensus EPS forecast." </p>
<p>The implication here being that if you, as a company, hire a former analyst to be your liaison with the analyst community, you can "manage" analysts' earnings expectations such that the company is in a better position to offer the market a "beat," however slight. </p>
<h2>Problems And Solutions</h2>
<p>The problem with all this is that people think lots of bad things about analysts. </p>
<p>Lourie notes that past research has shown the variety of conflicts analysts have when their firm handles investment banking or other functions, like auditing, for a company.</p>
<p>But there are no rules that seek to rein in an analysts' coverage of a company they are seeking to work for.</p>
<p>The obvious complication here is like, can you reasonably get an analyst to disclose in their research that they've applied for a job with Company X, or that they just had a phone interview, or a breakfast meeting, or something with a representative of Company X?</p>
<p>It's not clear what sort of leverage (or impetus) FINRA has with respect to adding these sorts of things. </p>
<p>But what is clear is that Lourie's work shows that there is some tilt toward more favorable coverage from analysts who cover a company in the final year before they begin working for that company.</p>
<p>Which is probably something we should at least be talking about. </p>
<p><a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2517957">Start by reading Lourie's full paper here »</a></p>
<h3><strong><br>NOW WATCH: <a href="http://www.businessinsider.com/t-boone-pickens-advice-from-dad-2014-10">T. Boone Pickens: Here Are The 3 Conditions You Should Set Before Taking Any Advice</a></strong></h3>
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<p><strong> </strong></p><p><a href="http://www.businessinsider.com/wall-street-analyst-conflict-study-november-4-2014-11#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/when-walking-away-means-moving-forward-2013-11Sometimes Walking Away From A Disagreement Is The Only Way Forwardhttp://www.businessinsider.com/when-walking-away-means-moving-forward-2013-11
Sat, 09 Nov 2013 06:05:00 -0500Dan Waldschmidt
<p dir="ltr"><img style="float:right;" src="http://static3.businessinsider.com/image/527d0b4d6bb3f7d338e9b7dd-480-/couple-staring-angry-mad-fight-3.jpg" border="0" alt="couple staring angry mad fight" width="480" /></p><p>Sometimes you just have to walk away.</p>
<p dir="ltr">Despite the effort you have already put in. Despite the emotional energy you have already invested. Despite your personal investment.</p>
<p dir="ltr">Despite the goal you hope to achieve.</p>
<p dir="ltr">You just have to walk away.</p>
<h3 dir="ltr">There are a lot of things to fight about in life.</h3>
<p dir="ltr">Religion, politics, money, personal freedoms &mdash; each one comes with different perspectives from millions of people around the world.</p>
<blockquote>
<p dir="ltr">There are moments when your position is vigorously opposed to the opinions of others. You aren&rsquo;t willing to budge. They aren&rsquo;t willing to budge. Two intractable positions. Firmly held beliefs.</p>
</blockquote>
<p dir="ltr">The only thing that makes that situation much more emotionally tasking is when your frustration bubbles over into distracting behavior.&nbsp;When you try to hurt other people instead of helping yourself.</p>
<p dir="ltr">Whether it is religion or politics or money or any other personal belief, there are times when you just have to walk away.&nbsp;When the moment for advertisement and evangelism is over. You only do more harm with more emotional advocacy.</p>
<h3 dir="ltr">Remember that when you&rsquo;re trying to navigate the stickiness of business.</h3>
<p dir="ltr">You will always have differences with those around you that can get in the way of a workable business plan.&nbsp;<span style="line-height: 1.5em;">Your big ideas and bold thinking can be undermined by the ideology of those with whom you wish to engage.</span></p>
<p dir="ltr">The hard truth is that you can spend your time fighting to convince everyone that you are right. Or you can walk away.&nbsp;<span style="line-height: 1.5em;">That&rsquo;s called having class. That&rsquo;s called taking the high road. Its not a sign of weakness.&nbsp;</span><span style="line-height: 1.5em;">And it doesn&rsquo;t mean that you&rsquo;re not as passionate about what you believe as everyone else around you.</span></p>
<h3 dir="ltr">It just means that you&rsquo;re in it to win the battle.</h3>
<p dir="ltr">Not a war of words. Remember that the next time you find yourself distracted.</p>
<p dir="ltr">Walk away.</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/how-to-get-people-to-listen-to-you-2013-10" >How To Get People To Listen To You</a></strong></p>
<p><a href="http://www.businessinsider.com/when-walking-away-means-moving-forward-2013-11#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/the-biggest-conflicts-created-by-the-most-massive-ad-company-merger-ever-2013-7These Are Worst Client Conflicts Created By The Biggest Ad Company Merger Everhttp://www.businessinsider.com/the-biggest-conflicts-created-by-the-most-massive-ad-company-merger-ever-2013-7
Mon, 29 Jul 2013 17:42:00 -0400Laura Stampler
<p><img style="float:right;" src="http://static2.businessinsider.com/image/51f6dc946bb3f75575000008-480-/coca-cola-coke-pepsi-1.jpg" border="0" alt="coca cola coke pepsi" width="480" /></p><p>When a major marketer chooses to spend hundreds of millions of dollars with a certain ad agency, it usually doesn't expect its arch rival to be housed under the same roof.</p>
<p>But after holding companies Omnicom and Publicis announced its surprise merger Sunday, making it the biggest ad entity in the world, the world couldn't help but notice that huge nemeses had overnight become part of the same family. Pepsi and Coke. AT&amp;T and Verizon. Apple and Google.</p>
<p>Omnicom CEO John Wren adamantly stated that he was not concerned about conflicts of interest.</p>
<p>"We're going to work extremely hard with our clients over problems and try to come up with creative solutions," he said."But at this point, if the deal is completed, there is &mdash; I don't believe, a significant client ... no single client would be significant enough to disturb the deal."</p>
<p>As holding companies have gotten bigger, and conflicts more common, they have come up with creative ways to retain conflicted business. Accounts can be split by geography or by agency, with "firewalls" between them. It's up to the client to trust that the splits are done in good faith, however.</p>
<p><a href="http://blogs.wsj.com/moneybeat/2013/07/29/publicis-and-omnicom-ceos-downplay-conflict-concerns/">According to the Wall Street Journal,</a> "One analyst said he has heard several times from executives, generally, that if two top ad agencies combined they should expect to lose about 8% to 10% of combined revenues because of conflict clients." Wren thinks the biggest loss would be 1% of revenues.</p>
<p>Since some huge companies with boatloads of different products, like Procter &amp; Gamble, already had different goods living in both Publicis and Omnicom, the merger won't be dramatic for some major clients. But for companies that don't like competition &mdash; S.C. Johnson historically hates conflict &mdash; the partnership could be problematic.</p>
<p>Here are some of the biggest conflicts:</p>
<h2>SODA</h2>
<ul>
<li>Coca-Cola (Publicis' Leo Burnett) vs. PepsiCo. (Omnicom's TBWA)</li>
</ul>
<p>Pepsi's entire ad campaign in the 1970's and 80's revolved around the Pepsi Challenge, which had a sole purpose of proving that consumers liked drinking Pepsi more than Coke. The fact that the two rivals will now be living under the same roof is by far the biggest conflict created by the merger.&nbsp;</p>
<p><a href="http://adage.com/article/agency-news/clients-publicis-omnicom-megamerger/243352/">Ad Age wonders if WPP and Interpublic</a>, two separate holding companies that have both worked with Coca-Cola, might have the ability to steal away the soda.</p>
<h2>WIRELESS PROVIDERS</h2>
<ul>
<li>AT&amp;T (Omnicom) vs. Verizon (Publicis)</li>
</ul>
<p>In fact, almost every telecom company (AT&amp;T, Sprint, T-Mobile, Verizon) <a href="http://www.bloomberg.com/news/2013-07-29/publicis-merger-would-put-archrival-ad-campaigns-under-one-roof.html?cmpid=yhoo">will now be under Publicis Omnicom Goupe's creative control if no one moves.</a></p>
<h2>TECHNOLOGY</h2>
<ul>
<li>Apple and Microsoft (Omnicom) vs. Samsung and Google (Publicis)</li>
</ul>
<h2>BEER</h2>
<ul>
<li>MillerCoors's Miller Light (Publicis' Saatchi &amp; Saatchi) vs. Anheuser-Busch's Bud Light (Omnicom's BBDO)</li>
</ul>
<p>A-B InBev, however, isn't concerned and has different labels with each holding company.&nbsp;"It doesn't change anything related to agency conflict," <a href="http://adage.com/article/agency-news/clients-publicis-omnicom-megamerger/243352/">VP of marketing Paul Chibe told Ad Age in an email</a>. "The holding-company approach is to have different network shops to manage potential conflicts. That doesn't change in the event of a merger. We work with Publicis and Omnicom agencies in many countries."</p>
<h2>AUTOMOBILES</h2>
<ul>
<li>There's a lot of car overlap between the company, although the divergences could still result in conflict. Nissan, General Motors, Toyota, and Volkswagen all have business in both holding companies, <a href="http://adage.com/article/agency-news/clients-publicis-omnicom-megamerger/243352/">Ad Age reports</a>.</li>
</ul>
<p><a href="http://www.huffingtonpost.com/2013/07/29/publicis-omnicom-merger_n_3671283.html">A Nissan spokesperson told Reuters</a>,&nbsp;"Renault and Nissan are both major global clients of both Publicis and Omnicom. We welcome the direction taken by Publicis and Omnicom to create a best-in-class communications, advertising, marketing and digital services company and will continue to work with them."</p>
<p>BMW sales chief Ian Robertson, on the other hand, was less optimistic. "Ideally, clearly we (would) have that independence from other manufacturers," he said. "But in a world which is now connected and there are so many mergers of this type, maybe that's something that is not an ideal position."</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/heres-the-big-downside-to-the-publicis-omnicom-merger-2013-7" >Here's the big downside to the Omnicom-Publicis merger</a></strong></p>
<p><a href="http://www.businessinsider.com/the-biggest-conflicts-created-by-the-most-massive-ad-company-merger-ever-2013-7#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/reuters-on-sandridge-ceo-2013-2The Reuters Reporters Who Took Down Aubrey McClendon Have Their Sights On A New Energy CEO (SD)http://www.businessinsider.com/reuters-on-sandridge-ceo-2013-2
Wed, 06 Feb 2013 12:27:00 -0500Rob Wile
<p><img style="float:right;" src="http://static6.businessinsider.com/image/511266456bb3f7472f000017-400-297/tom ward.png" border="0" alt="tom ward sandridge" /></p><p>Energy giant SandRidge has given CEO Tom Ward wide latitude to profit from personal oil-and-gas deals in ways that pose potential conflicts of interest with the company, <a href="http://www.reuters.com/article/2013/02/06/us-sandridge-contract-idUSBRE9150EM20130206">Reuters' Michael Erman, Brian Grow and Anna Driver report.</a></p>
<p>Grow and Driver are the same reporters who ran a series of reports last summer highlighting alleged conflict of interest by Aubrey McClendon, the CEO of Chesapeake Energy.</p>
<p>McClendon just announced he will be stepping down in April.&nbsp;</p>
<p>Through what Reuters describes as recent, "little-noticed" changes to his contract, Ward is now able to ink&nbsp;deals with SandRidge competitors as well as do business with SandRidge on any land that he owns or acquires.&nbsp;Before the changes, Ward was only allowed to make deals on land he owned prior to joining the company in 2006.&nbsp;</p>
<p style="padding-left: 30px;">The language in Ward's contract "doesn't pass the smell test," said Anne Sheehan, director of corporate governance for the California pension fund CalSTRS, which owns 880,000 SandRidge shares. "This board has sanctioned what Ward is doing."</p>
<p><a href="http://www.reuters.com/article/2013/02/06/us-sandridge-contract-idUSBRE9150EM20130206"><em>Read the full story on Reuters.com &gt;</em></a></p><p><a href="http://www.businessinsider.com/reuters-on-sandridge-ceo-2013-2#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/how-to-fight-off-office-politics-2013-2How To Kill Off Office Politicshttp://www.businessinsider.com/how-to-fight-off-office-politics-2013-2
Fri, 01 Feb 2013 11:29:27 -0500Eric V. Holtzclaw
<p><img style="float:right;" src="http://static5.businessinsider.com/image/510bed48eab8ea242b00000b-400-300/jenna-serio-fighting-boxing-muay-thai-knockout-2.jpg" border="0" alt="jenna serio, fighting, boxing, muay thai, knockout" width="400" height="300" /></p><p>Ah, office politics. I have worked at many large companies in the course of my career and one of the main reasons that I enjoy being in a smaller organization is the lack of politics. Don't get me wrong, politics are a disease that afflicts every company, but on a smaller scale, problems can be easier to identify and manage.</p>
<p>No matter if you are a junior associate or the CEO, you will eventually get involved in a sticky situation--whether you're an active participant or an unwilling third party. When you're a company leader, however, it's imperative that you prevent a petty issue between employees from escalating into a major point of contention. That's when an issue starts to stress the entire company.</p>
<p>Here is some advice on how to stay above the political fray:</p>
<p><strong>Cut It Off at the Pass</strong></p>
<p>When employees try to push a personal agenda or form unproductive alliances on different sides of an issue, it typically doesn't happen out of the blue. It builds over time. Pay attention to arguments in staff meetings and offhand comments in the break room. Draw attention to the conflict early so you can put a stop to the larger issue before it gets out of hand.</p>
<p><strong>Keep it Private</strong></p>
<p>A staff meeting is not the time for a debate. If you sense tensions arising, ask to table the discussion for another time. This allows tempers to cool off and keeps a private issue from going public.</p>
<p>You're not exempt from this advice, especially if you are run a company with a co-founder. If you have an issue, discuss it behind doors or even off site. The change in perspective might even help you see the issue differently.</p>
<p><strong>Address It Head On--But Get Out of the Middle<br /> </strong></p>
<p>An embattled employee may come to you trying to get you to take sides, or simply to vent. They may approach it innocently, saying they're asking for your advice. The best way to address this is head on. Offer to facilitate a conversation between the employees, but don't agree to become their arbitrator. It's best when the employees at odds can come to agreement on their own and in private.</p>
<p><strong>Play in Teams<br /> </strong></p>
<p>Don't&nbsp; create situations where employees or teams are forced to compete with each other--that can trigger divisions. Instead, when employees are interdependent and need to rely on colleagues to get their jobs done, they are less likely to resort to office politics for fear of burning a bridge. &nbsp;It also prevents an internal "us vs. them" mentality that can be destructive to a company's culture.</p>
<p><strong>Practice Damage Control<br /> </strong></p>
<p>If you have a close-knit leadership team, make sure you have an open line of communication. This is especially important if you are working with a co-founder. Report back about what employees are saying about one another. That way it's easier to limit the damage.</p>
<p><strong>Present a United Front</strong></p>
<p>Just like you do when your kids are trying to pit you and your spouse against one another, when an internal issue divides the staff, present a united front. If you or your partner are viewed as taking sides or feeding office politics it could cause further damage to morale and to your authority as "the boss."</p>
<p><strong>Play Nice With Your Partner<br /> </strong></p>
<p>If you have a direct conflict with a partner, don't let the issue linger and become more serious. Talk things out--professionally--and stick to the facts. Avoid emotions or personal agendas. For debates over issues like company finances or sweeping changes, consider bringing in an outside expert (accountant, attorney, etc.) who can analyze the situation objectively and provide counsel on a direction that meets everyone's needs.</p>
<p><strong>Call It Like It Is</strong></p>
<p>Even the smallest companies can have instigators who thrive on creating conflict. I say call it like it is: Get underneath what is motivating this behavior and take action. If you have started your own business, you have a pretty good intuition about what you want for the company and how to hire people who can make that vision happen. Follow your gut and recognize what's normal for a growing business and what is more harmful.</p>
<p>Employees who question you and push you in a healthy debate can be productive; those who work behind the scenes to generate conflict are not.&nbsp;Recognize when it's time to step in and put the issue to rest.</p>
<p>Sett the tone that political maneuvering will not be tolerated.</p>
<p><em>This <a href="http://www.inc.com/eric-v-holtzclaw/how-to-banish-office-politics.html">post </a>originally appeared at <a href="http://www.inc.com">Inc</a>. To read more, check out: </em></p>
<p><em><a href="http://www.inc.com/dave-balter/leadership-tips-great-CEOs.html">Ten Ways To Step Up Your Leadership</a><br /></em></p>
<p class="tagline"><a href="http://www.inc.com/suzanne-lucas/now-that-im-the-boss-do-i-have-to-turn-evil.html"><em>Now That I'm The Boss Do I Have To Turn Evil?</em></a></p>
<p class="tagline"><a href="http://www.inc.com/geoffrey-james/9-ways-to-forge-better-partnerships.html">9 Ways To Forge Better Partnerships</a></p><p><a href="http://www.businessinsider.com/how-to-fight-off-office-politics-2013-2#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/toronto-mayor-ousted-2012-11The Mayor Of Toronto Was Forced Out Of Office Todayhttp://www.businessinsider.com/toronto-mayor-ousted-2012-11
Mon, 26 Nov 2012 19:36:00 -0500Agence France Presse
<p><img style="float:right;" src="http://static2.businessinsider.com/image/4e85f94aeab8eaf719000030-400-300/rob-ford-toronto-mayor.jpg" border="0" alt="rob ford toronto mayor" /></p><p>A court ordered the mayor of Toronto, Canada's largest city, to be removed from office for violating conflict of interest rules when soliciting donations for his football charity.</p>
<p>Mayor Rob <a class="hidden_link" href="http://www.businessinsider.com/blackboard/ford">Ford</a> got into legal trouble when he spoke out at a city council vote in February against a $3,150 fine he was ordered to pay over the ethics breach.</p>
<p>A Toronto resident took him to court for violating the Municipal Conflict of Interest Act, which at trial Ford said he had not read.</p>
<p>Ford said he will appeal the ruling, and if he fails to have the decision overturned will run again for mayor in a by-election.</p>
<p>"I will fight tooth and nail to hold onto my job," he told reporters, blaming "leftwing politics" for the court action that led to the ruling.</p>
<p>The court has delayed the decision for 14 days to give city officials time to put their house in order.</p>
<div class="nc_footer">
<p>Copyright (2012) AFP. All rights reserved.</p>
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<p><img class="nc_pixel" src="http://pixel.newscred.com/px.gif?key=YXJ0aWNsZT01ZGE3MTU1ZDU1ZTQ4OWJjNDEzNWVlNzZjMTg2YThjZiZvd25lcj0xYjhjMzM1YzkwMmFjNGFiMTI4ZWU4ZWQ3NzNiZWUwNCZub25jZT0xODg4MjEyNS0wYWExLTRmZjAtYTlhNS05YWU0OGZmYTA4MWQmcHVibGlzaGVyPThjMDBmYmVlNjFkNWJjZjBjNjA5MmQ4YjkyZWJiY2Ex" border="0" alt="" width="1" height="1" /></p><p><a href="http://www.businessinsider.com/toronto-mayor-ousted-2012-11#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/legislators-sponsor-bills-that-benefit-them-2012-10The Insider Trading Ban For Congress Has Some Serious Loopholeshttp://www.businessinsider.com/legislators-sponsor-bills-that-benefit-them-2012-10
Mon, 08 Oct 2012 12:41:00 -0400Alexander Abad-Santos
<p><img style="float:right;" src="http://static2.businessinsider.com/image/5072f084ecad040928000004/congress.png" border="0" alt="congress" /></p><p>While insider trading is banned in Congress, it's still completely legal for lawmakers to sponsor bills that could benefit the businesses, industries, or their family members have invested in, and <a href="http://www.washingtonpost.com/politics/congress-members-back-legislation-that-could-benefit-themselves-relatives/2012/10/07/c2fa7d94-f3a9-11e1-a612-3cfc842a6d89_story.html">according to</a><a href="http://www.washingtonpost.com/politics/congress-members-back-legislation-that-could-benefit-themselves-relatives/2012/10/07/c2fa7d94-f3a9-11e1-a612-3cfc842a6d89_story.html"> The Washington Post</a><em>,</em> 73 congressmen and women have figured out how to use this loophole &mdash; a jump from the 16 they found when they published this study in February.&nbsp;</p>
<p>In March, <a href="http://www.nytimes.com/2012/03/23/us/politics/insider-trading-ban-for-lawmakers-clears-congress.html">Congress passed a ban on insider trading</a>&nbsp;after being <a href="http://www.theatlanticwire.com/national/2011/11/how-members-congress-get-rich-through-honest-graft/44928/">embarrassed by "60 Minutes"</a> last November on the ways members had taken advantage of their information to trade stock on hot legislative tips.</p>
<p>President Obama gave the practice mention in his State of the Union, and <a href="http://www.theatlanticwire.com/politics/2012/01/congress-doesnt-want-give-its-insider-trading-privileges/47836/#">after some protests from members</a>, some new rules went into effect like requirements to <a href="http://www.startribune.com/politics/national/172149601.html?refer=y">disclose stocks purchased on the Internet</a>.</p>
<p>So no more sneaky legislators financially benefiting from legislation! Now, as The <a href="http://www.businessinsider.com/blackboard/washington-post" class="hidden_link">Washington Post</a>'s team of Kimberly Kindy, David Fallis, and Scott Higham explain, it's all about legislators blatantly benefiting from legislation.</p>
<p>Due to the remaining loopholes, to name just one example, Rep. Mike Kelly, a Republican of Pennsylvania, was allowed to sponsor a natural gas bill the same month <a href="http://www.businessinsider.com/blackboard/exxon" class="hidden_link">Exxon</a> negotiated a multimillion-dollar deal with his wife.</p>
<p>Across the aisle, former Rep. Dennis Cardozo, Democrat of California, helped pass a bill that involved tax breaks for racehorses and then bought seven such racehorses when the new tax breaks came into effect.&nbsp;</p>
<p>"The practice is both legal and permitted under the&nbsp;ethics rules&nbsp;that Congress has written for itself, which allow lawmakers to take actions that benefit themselves or their families except when they are the lone beneficiaries," writes&nbsp;The Post, which looked at the financial disclosures of 535 members of the House and Senate and compared them with public records. <a href="http://www.washingtonpost.com/politics/congress/capitol-assets-some-legislators-send-millions-to-groups-connected-to-their-relatives/2012/01/10/gIQAyrzdxQ_print.html">They did an analysis which was published in February</a> and found 16 members "who have taken actions that aided entities connected to their immediate families." <a href="http://www.washingtonpost.com/politics/congress-members-back-legislation-that-could-benefit-themselves-relatives/2012/10/07/c2fa7d94-f3a9-11e1-a612-3cfc842a6d89_story.html">In their latest analysis published last night</a>, they found that number was actually larger, with 73 members using this loophole to benefit themselves and/or their immediate family in recent years. Now that isn't to say that there's an increase since the insider trading ban went into effect &mdash; The Post's team doesn't disclose how many of those cases are post-insider trading ban. But&nbsp;their example of Rep. John Yarmuth shows <a href="http://www.washingtonpost.com/politics/congress-members-back-legislation-that-could-benefit-themselves-relatives/2012/10/07/c2fa7d94-f3a9-11e1-a612-3cfc842a6d89_print.html">how relaxed that "lone beneficiary" loophole is</a>, which has been (in)active for at least five years:</p>
<p style="padding-left: 30px;">After&nbsp;<a href="http://apps.washingtonpost.com/politics/capitol-assets/member/john-yarmuth/" target="_blank" data-xslt="_http">Rep. John Yarmuth</a>&nbsp;(D-Ky.) took office in 2007, he asked the House Ethics Committee whether he could vote on legislation that might affect his personal holdings, including an investment worth as much as $5 million in his brother&rsquo;s home health-care business, Louisville-based Almost Family. The panel advised he was prohibited from actions that would benefit his assets in a &ldquo;direct and distinct manner, rather than merely as a member of a class.&rdquo; Otherwise, the committee said, he had a duty to vote.&nbsp;</p>
<p style="padding-left: 30px;">In office, Yarmuth joined the congressional&nbsp;<a href="http://www.congressweb.com/nahc/docfiles/Home%20Health%20Working%20Group.pdf" target="_blank" data-xslt="_http">Home Health Caucus</a>, a group of two dozen lawmakers that promotes the value of in-home health care.&nbsp;He also has helped co-sponsor a handful of bills of interest to the industry, including the Home Health Care Planning Improvement Act. That pending bill would expand the number of health professionals who can refer patients to home health care. And, in May, Yarmuth co-sponsored a legislative amendment to block across-the-board Medicare cuts to providers, including home health aides.</p><p><a href="http://www.businessinsider.com/legislators-sponsor-bills-that-benefit-them-2012-10#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/supreme-court-conflicts-with-obamacare-2012-5The Supreme Court Justices' Shocking Conflicts Could Determine The Fate Of Obamacarehttp://www.businessinsider.com/supreme-court-conflicts-with-obamacare-2012-5
Sat, 02 Jun 2012 11:30:00 -0400Abby Rogers
<p><img style="float:right;" src="http://static5.businessinsider.com/image/4f7c5710ecad041118000025-400-300/sonia-sotomayor-supreme-court.jpg" border="0" alt="sonia sotomayor supreme court" width="400" height="300" /></p><p>The Supreme Court's <a href="http://www.businessinsider.com/a-supreme-court-case-starts-this-month-that-will-change-the-election-and-american-history-2012-3" target="_blank">anticipated ruling on Obamacare this month</a> could be its most far-reaching decision in the past century.</p>
<p>But just as important as the decision itself are the personal conflicts of interest the justices have brought to the bench.</p>
<p>At least four Supreme Court Justices have blatant conflicts of interest, including <a href="http://www.opensecrets.org/news/2011/02/supreme-court-justices-personal-finances.html">investments in companies that</a> would be directly impacted by health care reform.</p>
<p>But Chief Justice <a href="http://www.businessinsider.com/blackboard/john-roberts" class="hidden_link">John Roberts</a> pretty much <a href="http://www.washingtonpost.com/opinions/supreme-court-needs-to-set-out-a-process-to-handle-conflicts-of-interest/2012/03/16/gIQABAYQUS_story.html" target="_blank">torpedoed the idea of justices recusing themselves</a> from the case.</p>
<p>So all that's left is to wonder if, and how much, these conflicts swayed the justices' votes.</p><h3>Justice Stephen Breyer holds tens of thousands of dollars in many health care companies.</h3>
<img src="http://static2.businessinsider.com/image/4fc7a959ecad04572f000004-400-300/justice-stephen-breyer-holds-tens-of-thousands-of-dollars-in-many-health-care-companies.jpg" alt="" />
<p><p>In his 2011 disclosure filing, Breyer admitted to holdings in at least six health care-related companies.</p>
<p>Among his holdings are <a href="http://www.thedailybeast.com/articles/2012/03/28/the-supreme-court-s-health-care-stock-problem.html" target="_blank">$15,000 to $50,000 in Amgen</a> and $50,000 to $100,000 in Novartis, The Daily Beast reported in 2012.&nbsp;</p>
<p>He also holds up to $15,000 in Genzyme.</p>
<p>Insurance companies, and other health care-related businesses, stand to benefit from the health care exchange mandated by Obamacare. Companies <a href="http://www.nytimes.com/2012/02/27/health/policy/a-wait-and-see-approach-for-states-on-insurance-exchanges.html?_r=3&amp;scp=1&amp;sq=health%20exchanges&amp;st=cse" target="_blank">stand to gain</a> because the U.S. Treasury will send subsidy payments directly to insurers on behalf of low- and moderate-income people, the New York Times reported.</p></p>
<br/><br/><h3>But Breyer's conflicted investments don't end there. </h3>
<img src="http://static3.businessinsider.com/image/4fc51bd86bb3f76730000011-400-300/but-breyers-conflicted-investments-dont-end-there.jpg" alt="" />
<p><p>Breyer holds $50,000 to $100,000 in Quest Diagnostics and owns shares in Cintas Corp., a hospital services provider.</p>
<p>In addition, <a href="http://www.thedailybeast.com/articles/2012/03/28/the-supreme-court-s-health-care-stock-problem.html" target="_blank">Breyer holds anywhere from $15,000 to $50,000</a> in companies that are in a position to deal with the regulatory requirements of Obamacare, according to The Daily Beast.</p>
<p>These businesses, such as ADP, claim they <a href="http://www.adp.com/tools-and-resources/health-care-reform.aspx" target="_blank">specialize in helping businesses</a> deal with the increased compliance requirements stemming from Obamacare.</p></p>
<br/><br/><h3>Justice Samuel Alito also holds health care investments.</h3>
<img src="http://static5.businessinsider.com/image/4fc530636bb3f79559000006-400-300/justice-samuel-alito-also-holds-health-care-investments.jpg" alt="" />
<p><p>Alito <a href="http://www.thedailybeast.com/articles/2012/03/28/the-supreme-court-s-health-care-stock-problem.html" target="_blank">owns shares in health care stock</a>, plus he holds up to $45,000 in Bristol-Myers Squibb, The Daily Beast reported.</p>
<p>Pharmaceutical companies, such as Bristol-Myers Squibb, <a href="http://www.forbes.com/2009/08/19/pharmaceuticals-obamacare-reform-business-healthcare-washington.html" target="_blank">spent as much as $150 million</a> in 2009 advertising health care reform, Forbes reported at the time.</p>
<p>Health care reform might actually repair the reputation of big pharmaceutical companies that have come out to support the overhaul, Forbes reported. And the law might not have a huge impact on drug companies because they typically market very expensive treatments to small groups of people, according to Forbes.</p></p>
<br/><br/><a href="http://www.businessinsider.com/supreme-court-conflicts-with-obamacare-2012-5#justice-clarence-thomas-has-faced-criticism-for-his-wifes-political-activities-and-his-failure-to-report-all-of-his-income-4">See the rest of the story at Business Insider</a>